Page 38 - The Indian EYE 012425

BUSINESS & TRADE JANUARY 24, 2025 | The Indian Eye 38

UNION BUDGET 2025-26

Finance Ministry scores several important

positives in its report card for 2024-25

India is on the path of fiscal prudence as the government has spent around 52.5 per cent of

the budget estimate of its deficit in the first seven months of FY25

OUR BUREAU tax experts, and the business com-
munity to champion innovative and
New Delhi
forward-thinking tax reforms.
s the Union Budget 2025-26 In response to invitations from
approaches, the Ministry of the Ministry of Finance, the Tax
AFinance on Thursday gave a Forum conducted multiple consul-
report card on the achievements and tations and presented its recommen-
progress made on last year’s budget dations on three occasions. These
announcements. The key announce- proposals are designed to attract
ments from the 2024-25 budget, in- fresh investments, simplify tax struc-
cluding measures to simplify taxation, tures, and position India as a global
reduce litigation, and improve tax cer- growth leader.
tainty, have shown notable progress. Tarun Bajaj, Chairperson of
In a social media post on ‘X’ fi- the US-India Tax Forum and for-
nance ministry stated “let’s reflect mer Revenue Secretary, said, “The
on the significant #UnionBudget Union Budget 2025-26 comes at a
announcements and other #Ma- critical juncture for India’s economic
jorInitiatives, and the progress made trajectory. As global headwinds per-
under them over time”. sist, it is imperative for India to prior-
Reduction in Litigation and itize reforms that foster investor con-
Appeals fidence, simplify the tax regime, and
The Central Board of Direct provide targeted incentives for sec-
Taxes (CBDT) has introduced the tors with transformative potential.”
One of the central recommen-
Vivad Se Vishwas Scheme, 2024, dations focuses on revolutionizing
aimed at resolving pending income Finance Minister Nirmala Sitharaman will be presenting her 11th budget on February 1 (ANI) direct taxation. The Forum suggests
tax disputes. To expedite the dispos- simplifying the Tax Deduction at
al of first appeals, additional officers come groups, the exemption limit easier to understand. Over 6,500 Source (TDS) structure to just two
have been deployed. The monetary for capital gains on certain financial suggestions have been received from or three rates, reducing compliance
limits for filing appeals have been assets was increased to Rs 1.25 lakh stakeholders, and 22 specialized burdens and enabling businesses to
raised to Rs 60 lakh for Tax Tribunals, per year from Rs 1 lakh a year. The committees are reviewing various as- prioritize growth.
Rs 2 crore for High Courts, and Rs 5 rationalization of tax rates and re- pects of the Act. The goal is to com- To strengthen the industrial eco-
crore for the Supreme Court, as per
CBDT’s guidelines. moval of indexation have simplified plete this exercise within six months. system, the Forum also proposes in-
computations.
These reforms highlight the
troducing a reduced 15 per cent tax
The scope of safe harbor rules
has been expanded, and trans- Reassessment and government’s progress on its budget rate for Maintenance, Repair, and
promises on reducing litigation, and
Overhaul (MRO) firms.
fer pricing assessments are being Reopening of Cases fostering a taxpayer-friendly envi- The Forum also suggests over-
streamlined to reduce international The provisions for reassessment
tax disputes. have been thoroughly revised. As- ronment. hauling indirect taxation by simplify-
ing the customs tariff structure to a
Meanwhile, as India gears up
Simplification of Capital sessments can now only be reopened for the Union Budget 2025-26, the three-tier system with rates of 0 per
Gains Taxation beyond three years if the escaped US-India Tax Forum--a specialized cent, 5 per cent, and 10 per cent.
The ministry highlighted that income exceeds Rs 50 lakh, with a Tax Policy Forum under the US-In- This alignment with internation-
major changes in capital gains tax- maximum period of five years. For dia Strategic Partnership Forum al standards is expected to attract in-
search cases, the reassessment win-
ation were implemented, including dow has been reduced to six years. (USISPF)--has presented an ambi- vestments in key sectors such as elec-
the introduction of only two holding This move is expected to enhance tious set of recommendations aimed tronics manufacturing. Recognizing
periods: one year for listed assets at bolstering the nation’s global eco- the growing significance of digital
and two years for unlisted and non-fi- tax certainty and reduce disputes. nomic standing. economies, the Forum proposes in-
nancial assets. Long-term gains now Comprehensive Review of the Comprising around 200 member troducing refund mechanisms for the
attract a reduced tax rate of 12.5 Income Tax Act, 1961 companies, the Forum serves as a Equalization Levy (EL) in cases of re-
per cent, while short-term gains are The government has initiated platform for dialogue on critical tax vised tax liabilities and simplifying tax
taxed at 20 per cent. a complete overhaul of the Income policy issues, connecting Govern- return forms for foreign companies
To benefit middle- and lower-in- Tax Act, 1961, to make it concise and ment of India policymakers, global without permanent establishments.

www.TheIndianEYE.com